Entrepreneurship is something that anyone with a great idea can take up, anytime. If you are someone who has a bright idea that can lead to development of a software, you are heading in the right direction. Software development is one such emerging business line that can open up an array of opportunities. Software Development Business has more traction because it has become ubiquitous today. Most of the businesses can no longer function smoothly without software.
Software business revolves around developing, distributing, and maintaining computer software that can be used to perform a multitude of tasks that may range from calculations, computing, control, assessment, instructions, learning, entertainment, performance enhancement, gaming, value addition, etc. Software companies broadly work on three models namely Cloud, On-premise and Hybrid.
Start a Software Development Business
According to a report published by IBISWorld, the software publishing industry in the US currently has a growth percentage of 3.9% per year with annual revenue of $238 Billion.
If you have an idea that can materialize into a successful Software Development Business, this guide is for you. With a good idea comes a bunch of inevitable questions such as ‘What would be the startup costs? How much funds do I need as ongoing-costs?’, ‘What should be my first step?’ and more.
Here are guidelines as to how to start a Software Development Business:
Have a Concrete Plan:
As with any other business, it is vital to have a plan. A clear plan will help in arriving at the specifics of the business and discover obstacles. Some of the factors to consider include:
- Is the business environment right for my idea?
- What is the intended target audience/ market?
- What could be the cost of setting up the business?
- What could be the charge structure?
- How do I get adequate funding?
Here it is very important to answer another question ‘Do People Want This?’ A lot of clarity will come from the answers to this particular question. This is because it is crucial to know if a prospective customer actually desires and needs what you are planning to build.
Identify The Target Market:
Another important aspect of a successful business is identifying the target market. The target market could almost be anyone or anywhere but should be well-defined. You need to understand the specific needs that people or businesses have and how to tailor-make a program that addresses those particular needs. This is why it is necessary to conduct market research and identify the target audience, their needs and preferences, and major competitors. The findings of the research will help you modify your idea accordingly if needed.
Know The Cost of Setting Up The Business:
The next important factor is the cost of setting up the business. Since the costs range from a few thousand to extraordinarily high amounts, there are no clear-cut answers. Some of the input costs include the cost of hardware & software, website hosting costs, data storage fee, employee costs, patent fee, trademark/ copyright costs, etc.
Costing of product/ services:
Software companies conventionally charge customers on a per-license basis, like the fee for buying Microsoft Windows, but many companies have adopted a software-as-a-service (SaaS) structure. In this arrangement, customers pay an ongoing fee to use the company’s program like Microsoft Office. A certain level of support is usually inbuilt in this fee.
A few software allow advertisements without charging up-front fees for using them, like Facebook, YouTube, etc. Software companies can increase their profits by providing value-added services, expedited support, extra training, and program customizations at an additional cost.
Build Your Team:
The key to successful business is retaining your clients. A good team will work like magic. A powerful team consists of people who share your vision and believe in it. Obtaining contracts and then hiring a technical team is a good tactic. With optimum growth, you could even hire a multifaceted team who could work on different projects simultaneously.
Ideally, one must have a team that can complete a project according to the client’s requirement, which significantly helps in brand building. Finding and retaining the right talent should score very high in the founder’s worklist.
Choose the Right Name:
Choosing the right name that would rightly represent your business is as important as the product. When registering a name, it is essential to check the following aspects; availability of domain name, social media platform, national trademark records, and companies’ registrar. It is imperative to secure the domain name before someone else does it before you.
While registering a business name, it is recommended that you research the name well by checking the following:
- State Business Records
- Social Media Platforms
- Federal and State Trademark Records
- Web Domain Availability
Focus on Business Development:
After setting up the bare necessities, the next criteria you should focus on is business development. Most software development companies market their programs online, through websites and other platforms. It is necessary to identify the right platform on which to market your product. The most appropriate platforms depend on what programs that business creates. Advertisement for business software ideally should not be hosted on gaming platforms and vice versa.
Build Repeat Customers:
A software company’s programs must work well, or else customers will switch to better, user-friendly, and error-free software. It is also necessary to create a support team that could provide comprehensive back-end support and, if necessary, onsite support. Remember, it pays well to have loyal clients; however, loyalty cannot be purchased but developed with the right product and good customer care.
Here is where the way you choose to sell your software will play a decisive factor. You can either sell your product directly to the end-user or allow your consumers to download it through your website. There would be some factors to keep in mind here, such as:
- If it is direct sales, are you dealing with SMEs and big companies?
- Are you selling licenses for your software?
- Are you going to customize your software to suit the customers’ needs?
- Are you going to offer a free trial of your product?
After Covid-19, the trends in Software Development Business have changed. Here are the anticipated trends that will be seen in 2021:
- Increase in demand and development of Native Apps
- AI will be at the core and will continue to stay in the spotlight
- More software/services will be developed that can cater to Remote Working Environment’s needs
- Individuals and companies both will largely utilize Cloud services
Following the above guide would ensure smooth sailing of your Software Development Business. While sustaining startups is not an easy job, you should not shy away from the difficulties that arise along the way. Currently, the software industry is one of the most dynamic one and also the one that promises a bright future.
An author of Namaste UI, published several articles focused on blogging, business, web design & development, e-commerce, finance, health, lifestyle, marketing, social media, SEO, travel.
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